VA buying back 35% of Velocity last October for about $700M using borrowed money has come back to haunt them. In conjunction with this loan 750 employees were retrenched to pay the interest on the loan each year.
I would agree that is going to look in hindsight a very poor decision. I wondered at the time how such programs can be valued at what they are given it is just a parasite on an airline and has no real independent value of it's own apart from an airline. How can it be valued at 2 Billion dollars one year and 6 months later be worth zero? How is that value accurate of a business that doesn't actually generate anything independently? I am sure it is all 100% correct from an accounting point of view but it just seemed at the time a case of the Emperor has no clothes.
Then of course there is the $9 000 000 bonus to the Velocity CEO for essentially turning up each morning. That alone is going to look pretty stark if the whole thing sinks in a couple of months.